Section 1886(d)(3)(E) of the Social Security Act requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary must adjust the standardized amounts “for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level.” This adjustment factor is the wage index. We currently define hospital geographic areas (labor market areas) based on the definitions of Core-Based Statistical Areas (CBSAs) established by the Office of Management and Budget and announced in December 2003. The wage index also reflects the geographic reclassification of hospitals to another labor market area in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act. Note that in the FY 2012 IPPS final rule, Centers for Medicare and Medicaid Services (CMS) finalized a policy that allows a Lugar hospital that is eligible for and accepts the outmigration adjustment to automatically waive its urban status for the 3-year period for which the outmigration adjustment is effective.
1.The CCNs with a “B” in the 4th position indicate a campus of an MCH located in a different CBSA from the main provider. The campus’s wages and hours are allocated to the CBSA of its physical location. The wage index reflects the CBSA of its location, or the MGCRB reclassified wage index, if applicable. The case-mix index and average hourly wages are not separated by campus; they reflect the provider as a whole.
2.A blank indicates FY 2015 MedPAR (which is used for the FY 2018 rates) was not available for the provider, and therefore, this provider was not included in the rate setting process.
3.This is the hospital’s final FY 2018 wage index with all applicable adjustments.
4.A blank indicates wage data not available for the CCN for the fiscal year or all three fiscal years.
5.Hospitals cannot receive the out-migration adjustment if they are reclassified under section 1886(d)(10) of the Act or redesignated under section 1886(d)(8)(B) of the Act or redesignated under section 1886(d)(8)(E) of the Act.